Higher input costs and freight rates saw UltraTech Cement report a drop of 13.5 per cent in net profit for the first quarter of 2013-14 at Rs.673 crore. net sales fell 2.3 per cent to Rs.4,958 crore.
During the quarter, the company’s operating profit was down 10 per cent at Rs.1,237 crore.
“The quarter witnessed an increasing trend in logistics and raw material cost, linked to increase in railway freight and diesel prices. The benefit of softening in prices of imported coal was offset by the depreciation in rupee,’’ UltraTech said in a statement. The company said the outlook continues to remain challenging.Industry watchers felt the quarterly showing was better than peers. The market did not react negatively to the performance and the stock moved up by Rs.15 (0.8 per cent) to close at Rs.1,880 on the Bombay Stock Exchange.
UltraTech Cement plans to increase its capacity by another 10 million tonnes per annum (tpa) to 64.65 million tonnes in the next 20 months. Addressing shareholders at the company’s 13 annual meeting, Kumar Mangalam Birla, Chairman, said the company’s total capital expenditure under implementation for the project was Rs.13,700 crore. The company’s cement capacity is today 53.9 million tpa with 3 million tpa overseas.
Mr. Birla said “I believe the sector would do better if the government meets with its request for a reduction of the heavy tax burden that is currently imposed on the sector. Likewise, coal linkage is critical to the cement sector”.